Haidilao International Holding has agreed to provide its founder, Zhang Yong, with a one-month loan of up to the Hong Kong dollar equivalent of 100 million yuan (US$14.9 million), a move that has raised market speculation as investors closely watch Beijing’s October 22 deadline for offshore trust taxation.

The Hong Kong-listed hotpot chain said in a stock exchange filing on Monday night that it would fund the loan from internal resources and charge interest at 0.6 percentage points above the one-month Hong Kong interbank offered rate. The principal amount translates to around HK$117.2 million.

Zhang, the company’s controlling shareholder, chairman and CEO, could use the money only for “personal financial arrangements”, the filing said. The funds could not be used to finance purchases of Haidilao shares, loans or guarantees to third parties, or any purpose that breached listing rules or regulatory requirements, it added.

Haidilao also said it reserved the right to monitor how the money was used. It said the group had ample funds and that the loan would not “affect daily operations or business development”. The interest income would also benefit the group and its shareholders, it added.

The filing did not elaborate on the purpose of the loan or mention any tax-related considerations. The company did not immediately respond to a request for comment.

The deadline stems from rules Beijing announced on July 24, requiring Chinese tax residents to pay a 20 per cent individual income tax on gains from assets held in offshore trusts and on income generated by those trusts.

Owners of existing trusts had 90 days from the announcement to declare and pay outstanding taxes without incurring late-payment surcharge, according to an official notice.

Company filings showed Zhang and his wife, Shu Ping, controlled about half of Haidilao through discretionary trusts and holding companies.

Both were Singapore citizens, Chinese media had reported, citing Haidilao’s 2018 listing prospectus. But those with foreign nationality could still be treated as Chinese tax residents if their main economic interests remained in China – a phrase law firms said the new rules left undefined.

Mainland China accounted for about 96 per cent of Haidilao’s revenue as of the end of June, according to its interim report.

On September 8, SP NP, a holding company controlled by a trust established by Shu, sold 259 million shares, or 4.65 per cent of Haidilao, at HK$10.62 each, raising about HK$2.75 billion, according to a stock exchange filing. The couple’s stake now stands at about 45.51 per cent.

Although Haidilao said the sale was a personal matter for the shareholder and unrelated to its business, investors linked the disposal to the new tax rules. The stock dropped about 10 per cent over the following two trading days, according to a South China Morning Post report.

In a September research note cited by international media, Morgan Stanley described the stake sale as a market “surprise”, warning that tax-related concerns would continue to weigh on sentiment until investors gained confidence in Haidilao’s earnings outlook and were assured there would be no further disposals. Shares of Haidilao fell more than 4 per cent by early afternoon on Tuesday.